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Monday, December 21, 2009

Morning Market Report

Markets are up this morning after taking a hit late in the week. The Dow is up 80 plus points this morning the S&P and NASDAQ have similar up movements. There's strength this morning after Alcoa and Intel each got upgraded. Intel was upgrade by Barclay's and Alcoa by MSDW. Dubai World is currently meeting with each of its 90 creditors.

Representatives of more than 90 Dubai World bank creditors on Monday attended the first face-to-face meeting between the company and its banks since it told them to prepare for the restructuring of the $22bn in debts needed to keep it out of the insolvency courts.

Creditors were meeting a six-strong co-ordinating committee, including HSBC and RBS, to hear Dubai World sketch out plans for its restructuring, now that troubled developer Nakheel’s $4.1bn obligation on December’s sukuk will be paid off thanks to a $10bn bail-out loan from Abu Dhabi.

To meet the government’s terms for further support on the remaining $5.9bn bail-out, Dubai World was expected to ask creditors to freeze debt repayments until May next year.

Shares in the Dutch luxury car firm, Spyker, have soared after it renewed a bid for General Motor's Swedish car business Saab.

By mid-morning Spyker shares were up 27% at 2.17 euros in Amsterdam. GM has until 1700 US Eastern time (2200 GMT) on Monday to respond to Spyker's bid.

Spyker's chief executive Victor Muller said on Sunday he was "very confident" his new offer would lead to a deal.

While equities show strength, that's lead to weakness in bonds. The ten year is now at 3.61%. That's the highest it's been since the summer. The yield spread between the two and ten year is at a new record. It's currently at 2.78%. The three month t bill is holding stead at .035%. Crude oil is inching up this morning to $73.53 a barrel. Gold is doing the same and it's at $1115.00 an ounce.

It was generally a down day in the Far East but it's up across the board in Europe. The Hang Seng in China was down 1.08%, the NIKKEI in Japan was up .41%, while the Straits Time Index in Singapore was down .56%. In Europe, the FTSE in London was up 2%, the DAX in Germany was up 1.44%, and the Spanish index was up 1.08%.

Meanwhile, the dollar is showing strength this morning. It's up .07% against the Euro, up .48% against the British Pound and up .43% against the Japanese Yen. That breaks a general pattern of having the inverse effect of equities.